Economic Development under the New Normal Is to Focus on Enhancing the Inherent Dynamism of Economic Growth

2017-03-03

One of the essential and derivative problems relating to China’s economic growth is the inadequacy of inherent dynamism, which also leads to financial risks and regional difficulties. With regard to the economic development under the new normal, a major issue to be tackled is to promote the transformation and continuation of the old and new driving forces.

First, the major factor to judge whether the economy has a solid foundation for development is to see whether the new driving forces can really be formed and play a leading role in economic growth. There are many positive factors for economic growth, but the new driving forces are not strong enough across the board.

Second, the traditional comparative advantages are still inadequate, but it does not mean that these advantages are phasing out. China’s high quality labor resources are abundant with a relatively low labor cost, the investment demand is still strong in urban and rural areas, and the residents’ overseas consumption is boosting. The economic growth under the new normal includes the development of new industries as well as the improvement of the quality and efficiency of traditional industries; it also includes supply-side structural upgrading as well as the releasing of potential on the demand side.

Third, the enhancement of inherent dynamism relies on targeted policy measures, the promotion of supply side structural reform, domestic demand, and people’s initiatives. The government’s work needs to focus on strictly implementing the regulations relating to environmental protection, product quality and safety, effectively managing employment issues, and addressing systematic risks. Some issues could be dealt with through market competition to determine which businesses could survive.

Fourth, the methodology of reform can be further optimized by combining top-level design with grassroots level exploration, and appropriately handling the relationship between law and regulation-based reforms and encouragement for massive explorations. The enthusiasm of cadres should be given full play in order to stabilize growth, promote reform, and adjust structure.